Westfield sells half of Stratford City development

Westfield Group has agreed to sell half its stake in the retail component of Westfield Stratford City for £871.5m to a new joint venture comprising APG of The Netherlands and Canada Pension Plan Investment Board. Westfield will make a development profit of about £300m on the deal.

Westfield will retain full ownership of the adjacent non-retail development sites, where it has invested about £182m and which are expected to create significant extra value over time. The total value of the combined Stratford City site will be more than 1.9bn.

The Australian group expects to reinvest retained earnings into its future capital activities including redevelopment pportunities, which have expected unlevered long term annual investment returns of 12-15 percent.

Westfield’s development of Stratford City, which is next to the site of the 2012 London Olympics, is primarily focused on the creation of a 1.9m sq ft major retail and entertainment destination which is scheduled to be completed in the third quarter of 2011. Around 75% of the retail area is either leased or committed to date.